Changes in the accounting treatment of financial instruments at overseas subsidiaries and other entities

「The company applied Practical Solution Report No. 18, etc., from the beginning of the first quarter of the current fiscal year. Where overseas subsidiaries and other entities apply International Financial Reporting Standard 9, "Financial Instruments," and elect to present subsequent changes in the fair value of equity instruments in other comprehensive income, the corresponding amount of gains or losses on the sale of such equity instruments and the corresponding amount of impairment losses are adjusted as current-period profit or loss in the consolidated closing process.」

「The company applied, from the beginning of the first quarter of the current fiscal year, Practical Solution Report No. 18, "Practical Solution on the Accounting Treatment of Overseas Subsidiaries, etc., in Preparing Consolidated Financial Statements" (14 September 2018), and Practical Solution Report No. 24, "Practical Solution on the Accounting Treatment of Associates to Which the Equity Method Is Applied" (14 September 2018) (hereinafter, "Practical Solution Report No. 18, etc."). Where overseas subsidiaries and other entities apply International Financial Reporting Standard 9, "Financial Instruments," and elect to present subsequent changes in the fair value of equity instruments in other comprehensive income, the corresponding amount of gains or losses on the sale of such equity instruments and the corresponding amount of impairment losses are adjusted as current-period profit or loss in the consolidated closing process. The application of Practical Solution Report No. 18, etc., follows the transitional treatment, and the cumulative effect of the change in accounting policy has been recognised in retained earnings at the beginning of the first quarter of the current fiscal year. As a result, at the beginning of the first quarter of the current fiscal year on the quarterly consolidated balance sheet, retained earnings decreased by ¥1,215 million and the valuation difference on available-for-sale securities increased by ¥1,215 million.」